Monday.com LTD (NASDAQ: MNDY) is one of many initial public offerings (IPOs) designed to profit from the pandemic cloud-computing and remote work boom.
Monday (MNDY) went public at $178.87 on 10 June 2021 and rose to $232.51 on 18 June 2021. Conversely, Mr. Market paid $210.48 for Monday on 19 July 2021.
So what is Monday why is it attractive to Mr. Market? Monday operates a visual platform that can manage, plan, organize, and track all of a team’s work in one place, a website claims. They call the platform Monday.com and you can access it through Monday’s website.
The Monday.com Visual Platform
The visual platform can integrate with many other solutions. Those solutions include Outlook, Microsoft Teams, Dropbox, Slack, Zoom, Google Calendar, Google Drive, Excel, Gmail, LinkedIn, OneDrive, Zapier, and the Adobe Creative Cloud.
The platform integrates all of a team’s data in the cloud. It also provides a fast search engine that can find projects, people, and data in the company cloud.
Monday’s platform also automates many online tasks including notifications and data management. One way Monday.com (MNDY) automates tasks is with Monday apps. Users can buy Monday apps from Monday’s app store or develop their own.
How Monday cashes in on Work From Home
Monday (NASDAQ: MNDY) claims users can create and package custom apps and integration that operate on top of the Monday.com platform.
They claim over 10,000 teams worldwide use Monday.com. Monday’s users include Uber, Adobe, Disney’s Hulu, Unilver, Abbott, Alixon, Genpact, and Anadarko.
Monday offers some solutions of its own including the Kanban Workflow software and Gantt. Gantt tracks, plans, and executes projects by creating activity charts. Gantt can create colorful charts from Excel Spreadsheets.
Monday.com offers project management, inventory tracking, and remote work workflow solutions. Monday.com offers HR, software development, operations, IT, sales and CRM, and marketing and creative solutions.
Can Monday.com’s Growth Continue?
I think Monday.com’s growth will continue because of the growing popularity of remote work.
Upwork estimates 41.8% pf Americans were fully remote workers in 2020, the Future of Workforce Pulse Report claims. Additionally, 36.2 million Americans will work remotely by 2025, Upwork predicts.
CNBC claims the number of Americans working remotely could increase by 87% between 2019 and 2025. Moreover, 26.7% of the US workforce was fully remote at the end of 2021. In addition. Gallup estimates 56% of Americans sometimes worked remotely in January 2021, US News & World Report notes.
Therefore, the market for Monday.com’s product work management software is growing. More people work remotely which forces many organizations to buy work managements solution such as Monday.com.
Monday.com Loses Money
Monday.com LTD (MNDY) is losing money. The company reported an operating loss of -$37.85 million on 31 March 2021. The operating loss grew from -$20 million on 31 March 2020.
However, Monday.com’s quarterly gross profit grew from $27.34 million on 31 March 2020 to $51.05 million on 31 March 2021. Additionally, Monday’s quarterly revenues grew from $31.93 million on 31 March 2020 to $58.97 million on 31 March 2021.
Notably, Stockrow estimates that Monday.com’s revenues grew by 84.7% in the quarter ending on 31 March 2021. Hence, Monday is capable of incredible rates of growth.
Finally, Monday.com does not generate cash. It reported a quarterly operating cash flow of -$600,000 on 31 March 2021. The quarterly operating cash flow rose from -$5.13 million on 31 March 2020.
Significantly, the quarterly ending cash flow fell from $167.66 million on 31 March 2020 to $126.88 million on 31 March 2021. In addition, the cash and short-term investments fell from $139.81 million on 31 March 2020 and 31 December 2020 to $134.28 million on 31 March 2021.
What Value does Monday.com Have?
Thus, Monday.com(NASDAQ: MNDY) finished the pandemic year with less cash than it had at the beginning.
Plus, the total debt grew slightly from $21.02 million on 31 March 2020 to $21.12 million on 31 March 2021. In contrast, the financing cash flow fell from $2.04 million on 31 March 2020 to $31,000 on 31 March 2021.
Moreover, Monday.com’s total assets fell from $147.62 million on 31 March 2020 and 31 December 2020 and $145.75 million on 31 March 2021. Monday finished the first year of the pandemic with less value than it had going in.
Monday.com frightens me because Mr. Market paid $210.48 for a company that loses money and value. I think this shows investors are buying the idea of a company rather than the company itself.
Monday.com cannot compete
To elaborate, investors love the idea of Monday.com (MNDY) which is a platform that can handle all work from home chores. However, there is no evidence Monday’s platform is better than its many competitors.
In particular, I cannot see how Monday.com can people with larger and better-capitalized competitors that offer similar platforms. I think Monday’s three biggest competitors are Microsoft (MSFT), Oracle (ORCL), and Alphabet (GOOG).
Microsoft (NASDAQ: MSFT) had $125.407 billion in cash and short-term investments and $165.614 billion in total assets on 31 March 2021. The Oracle Corporation (NYSE: ORCL) had $46.554 billion in cash and short-term investments and $55.567 billion in total current assets on 31 March 2021.
Finally, Alphabet Inc. (NASDAQ: GOOGL) had $135.104 billion in cash and short-term investments and $172.137 billion in total assets on 31 March 2021.
In comparison, Monday.com (MNDY) had $134.28 million in cash and short-term investments and $145.75 million in total assets on 31 March 2021. Therefore, I think Monday cannot compete.
Monday.com has no future
Alphabet, Microsoft, and Oracle have enormous amounts of money to invest in their platforms. Hence, those companies can replicate any service or product Monday can create.
In addition, all three behemoths can afford to sell subscriptions to their workforce platforms at low prices to drive Monday out of business. Thus Monday.com cannot compete.
I think investors need to avoid Monday.com (MNDY) because it lacks the resources to survive. I predict Monday.com will collapse because it no money.
Finally, I think Monday’s $210.48 stock price proves there is a cloud services bubble. Mr. Market is paying ridiculous prices for companies with no value, and no money. I conclude Monday.com has no future in today’s market.